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Internet 101

January 14, 2012
As a brick and mortar retailer, i've always perceived the Internet as dangerous a competitor as any I’ve ever had. That bias has made me an nay-sayer when it comes to how manufacturers use the Internet. I’ve always said “no” to vendor-run E-tail sites,  "no" to MAP’s that favor low overhead web sites, and "no" to web sites that are allowed to sell outside of their physical location’s marketing area. The problem is, I’ve said “no” so much, I’ve never thought about whether there are positive ways for retailers and manufacturers to use the Web.

If ever there was a time to reevaluate my thinking, it’s now. No matter how easy it is to say what we don’t want, we as an industry have to decide what we do want. We need to get ahead of this phenomenon. Note, I said “industry” not “retailers” or “vendors.” If you think about it, the easiest path for a retailer or vendor to take would be to redesign their sites to do e-tailing. If I do that, I have to contend with vendors who will cut me off for fear I might disturb their distribution network. If vendors do it, retailers will consider them direct competition and drop them. Unilateral solutions like these just won’t work. It is going to take a partnership of some sort.

Before trying to figure out what that partnership should look like, we need to understand why the Internet works and how it fails when it does retail. Let’s do the “why it works” thing, first. Here are some answers I got when I asked my staff and some friends why they buy anything from the Internet.

It’s convenient. I can shop from home any time of day or night.
This was at the top of everyone’s list. Most meant it was convenient not to have to leave home to shop. (Note: It wasn’t just that they didn’t have to leave home, they also said they could shop in their underwear or pajamas. Who knew people hated to get dressed so much?) But some meant they didn’t have to go from store to store to find a product. One search on the Internet not only gave them all of the product information, it also pointed them to where to shop

Pricing on the Internet is usually cheaper than at a local store. Whether this is true or not is highly debatable; but, it is how Internet pricing is perceived and perception is reality.

There is a wide range of products on the Internet that I can’t find locally. Usually this meant they could find any product, no matter how obscure, on the Internet. Again, it turns out that many of these “obscure” products were available locally albeit not as readily as over the Internet.

Web sites can give me a deeper understanding of a product than a local sales consultant can. This is more true than not. Web sites can and do include much more written and visual information than a typical face-to-face sales presentation. It also appears that a customer’s attention span is much longer on the Internet than at a brick and mortar location.

Here’s what those same people answered when I asked them why they wouldn’t buy over the Internet.

I can’t touch the item to get a real life impression of it. This was at the top of everyone’s list. Many were concerned that the product couldn’t live up to the photo presentation of the web site. When talking about clothing or furniture, the main concern was they really couldn’t tell about the “fit and finish, comfort, or true color” of the product from a picture or video.

I don’t want to wait for the product to be shipped to me. Even with expedited delivery, it isn’t gratification if it isn’t immediate!

Freight is too high. This only held true for web sites that didn’t offer free freight. It also seemed that this was another matter of perception than reality. Compared to the 12% - 20% freight rates that we are paying, many of the freight quotes seemed quite reasonable to me.

I don't know if the seller can be trusted. Unless the e-tailer had national brick and mortar stores, consumers had a real aversion to dealing with unknown e-tailers, particularly those that didn’t have a physical location with a street address shown on their web site.

Returning a product can be a hassle.
Funny, most of the customers at our brick and mortar store never ask if they can return a set of furniture if they don’t like it. However, when it comes to an Internet purchase, they have a real fear  they will be stuck if a purchase is received broken, is defective, is the wrong color, or doesn’t appeal to them in real life as much as it did in pictures.

There are so many choices, I get confused and don’t purchase anything. As an example, we have had customers come in who have spent hours searching the Internet for outdoor furniture. They tell us they finally gave up trying to buy on the Internet because there was so much information, it confused them. This is a case where too much information is worse than too little.

Let’s put together these wants and objections to come up with the ideal outdoor/casual furniture web site would look like.

It would always be available and offer as wide a range of products from all of the vendors in our industry. The product information would include pictures, written information, and video demonstrations. A brick and mortar location in the consumer's area would be associated with the site.  that would allow customers to see exactly what they are buying before they buy it. If they didn’t want to go to the physical location, they could order actual frame and fabric swatches from the site for free. The site would also offer access to a live person to help with design. An area of the site would be devoted to Community discussions to help consumers make decisions. Prices would be very competitive. Products would be available for immediate delivery or pick up from the associated brick and mortar store.  Returns could be made back to that same store. Delivery would be through reasonably priced “white glove” delivery services. The seller would have a brick and mortar presence along with an A+ Better Business Bureau rating, a liberal return policy, and a spelled out information privacy policy. Warranty concerns would be handled by the site or the brick and mortar store.

Think that is impossible? Next time, we’ll think outside the box and see if it really is.

Yours in confused retailing, Bruce